1. Hamilton’s Financial Plan and the Whiskey Rebellion

2. Hamilton's Financial Plan
Hamilton presented a 3 step program to improve finances
#1: Pay off all war debt
Combine all state debts into a single national debt…$52 million
Many Southern states had repaid their debt
Replace old bonds issued by the national government with new bonds. Paying off all the loans would reestablish the United States’ credit

3. Debt/Population ($ per person)
Hamilton's Financial Plan
#1: Pay off all war debt
Year
Total
Population
National Debt
Debt/Population ($ per person)
1790
3,930,000
$75,463,476.52
$19.20
1791
4,050,000
$77,227,924.66
$19.07
1792
4,170,000
$80,358,634.04
$19.27
1793
4,300,000
$ 78,427,404.77
$18.24
1974
4,430,000
$80,747,587.39
$18.23
1795
4,560,000
$83,762,172.07
$18.37
1796
4,700,000
$82,064,479.33
$17.46
The national debt of the United States, according to the Treasury Dept. Report, included $40 million in domestic debt as well as $12 million in foreign debt, each inherited from the Continental Congress.
In addition, the thirteen states altogether owed $25 million from debts accrued during the American Revolution. The combined US debt, as calculated, stood at $77 million

4. #2: Raise government revenue
Hamilton's Financial Plan
#2: Raise government revenue
Hamilton felt industry (manufacturing) would make economy stronger
Proposed a tariff to encourage American products
South had little industry & opposed the tariff
Congress should approve many new taxes
A new whiskey tax was proposed
New taxes would give govt. new financial powers
The tax would ensure a steady flow of income to the government

5. Bank Plan Hamilton's Financial Plan
Bank would give government a safe place to keep money
Businesses would be helped through loans
Bank would issue bank notes (paper money used as currency)
#3: National bank that would serve many purposes

6. Financial /Political Debate
How should the constitution be interpreted?
Financial /Political Debate
How much power should the federal government have?

7. Plan Creates Conflict Elastic Clause Reserve Clause
Hamilton believed in a loose interpretation of the constitution
A very broad and flexible view of power
Doing what is “necessary and proper”
Thomas Jefferson and James Madison Argued for a strict interpretation of the Constitution
If Constitution does not mention it, the government cannot do it.
Elastic Clause
Reserve Clause
10th Amendment

8. Compromise for approval
To get his plan approved, Hamilton created a compromise with Thomas Jefferson.
Jefferson would support Hamilton’s financial plan if Hamilton would support moving the nation’s capital to the South
Created a new Southern capital called City of Washington, District of Columbia

9. Compromise creates a Capital

10. The Whiskey Tax
Hamilton tries to increase revenue for the U.S. Government
Tax on all distilled spirits passes Congress in 1791

11. Whiskey Rebellion
From Pennsylvania to Georgia western farmers refuse to pay tax
Tax collectors were attacked

12. Rebellion Location
Rebellion in the western part of the state

13. End of Rebellion Militia breaks up rebellion Insurgents arrested
Washington offers pardons in exchange for oaths of loyalty to the government

14. Why is it important?
Proved that the federal government under the new Constitution had power
Washington was willing to use military force to enforce federal law